Study: Canadian Net Sales ‘Puny’

E-commerce sales in Canada accounted for only 0.2 percent of total private sector sales last year, a report issued Thursday by Statistics Canada found.

The report said that the U.S., with a population approximately nine times that of Canada, spent nearly 13 times as much online in just the fourth quarter of 1999 as Canada did the entire year.

Americans spent $5.2 billion (US$) — accounting for 0.6 percent of total retail spending — in those final three months. Canadian consumers spent $411 million online for the year.

“It’s a puny amount,” Duncan McKie, senior vice-president with Toronto market research firm Pollara, Inc., said in published reports. “I think what it shows is that [Canada is] still behind.”

Despite the relatively small impact on overall retail sales, Internet use in the country of 30 million people has increased, according to the report, the first national study of the e-commerce and Internet trends of America’s neighbor to the north.

B2B Spending Rises

The survey of 23,000 businesses and public institutions found that business-to-business (B2B) online spending is up significantly in Canada. Manufacturers spent about $900 million, or 22 percent, of the estimated $4.2 billion that changed hands online in the entire year.

Retailers followed manufacturers with 15 percent of online spending, while the country’s information and cultural industries ranked third with 13 percent. Hotels and food services attracted 10 percent of spending, edging out the scientific and technical services industries, which came in at just under 10 percent.

Content Over Sales

Only 10 percent of Canadian companies are selling goods and services over the Internet, however, an indication that many view the Internet more of an information conduit than a channel to increase their sales.

On the other hand, 14 percent of Canadian businesses bought goods and services online last year. The only three sectors to sell more goods and services online than they bought were hotel and food services, administration and support services, and the finance and insurance industries, the report said.

Public Sector Logs On More

Only 28 percent of Canadian private sector employees had Internet access by the end of last year, Statistics Canada said. In contrast, 59 percent of public sector employees had the capability to go online in 1999.

Some 22 percent of Canadian private sector companies had a Web site by 1999, while 69 percent of public institutions had a Web presence of some sort.